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Published in the Journal of Risk and Insurance, the study was conducted by Associate Professor Katja Hanewald and Professor Hazel Bateman, both from the School of Risk & Actuarial Studies at �ʹڲ�Ʊ Sydney and members of the �ʹڲ�Ʊ Ageing Futures Institute. They were joined by co-authors Professor Hanming Fang from the University of Pennsylvania and �ʹڲ�Ʊ PhD graduate Tin Long Ho.

The research surveyed 1,200 urban homeowners in China aged 45 to 64, presenting participants with three ways to fund a single-premium long-term care (LTC) insurance product: using savings, a reverse mortgage, or a home reversion arrangement. Each participant was assigned a hypothetical financial profile based on their reported savings and home value, and completed interactive tasks indicating how much of their wealth they would allocate under each option.

The results showed that demand for LTC insurance increased when participants could use housing wealth in addition to savings. On average, they allocated 5.2% of total wealth when only savings were available, compared to 15.7% when a reverse mortgage was available alongside savings, and 12.8% when home reversion was available alongside savings.

“These findings suggest that older adults are more likely to consider LTC insurance when they have flexible financing options,” said A/Prof Hanewald. “Home equity release products and programs like Australia’s Home Equity Access Scheme could support new approaches to funding care in retirement and help more people age in place.”

The study also highlights the importance of product understanding and trust in insurers, both of which were positively associated with insurance uptake. Conversely, strong bequest motives and expectations of family-provided care were associated with lower demand.

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